Description

BSE circular regarding standardization of file format for eligible collateral securities with specified haircut requirements and permitted quantities.

Summary

BSE has issued a circular regarding the standardization of file format for eligible collateral securities. The annexure provides details of non-cash securities that can be used as collateral for December 2025, including company names, ISIN codes, overall permitted quantities across all segments, and applicable haircuts based on VaR margin (6σ) or minimum 9%.

Key Points

  • File format standardization for eligible collateral across BSE segments
  • Applicable month: December 2025
  • All listed securities are non-cash collateral type
  • Haircut methodology: Higher of 9% or VaR Margin based on 6 sigma
  • Overall permitted quantities specified for each scrip across all segments
  • Covers major blue-chip and mid-cap securities including ABB India, Bajaj Finance, Bharat Electronics, BEML, Bata India, and others

Regulatory Changes

Standardization of collateral file format to ensure uniformity in reporting and processing of eligible securities used as collateral by clearing members. This aligns with risk management framework and margin requirements.

Compliance Requirements

  • Clearing members must adhere to the standardized file format for submitting eligible collateral
  • Members must ensure collateral securities submitted are within the overall permitted quantities specified
  • Applicable haircuts (minimum 9% or VaR-based 6σ, whichever is higher) must be applied to collateral valuations
  • Member-wise permitted quantities for each segment must be monitored and complied with

Important Dates

  • Applicable Month: December 2025
  • Circular Date: December 17, 2025

Impact Assessment

Operational Impact

  • Clearing members need to update their collateral management systems to align with the standardized file format
  • Enhanced transparency in collateral eligibility and quantity limits

Risk Management Impact

  • Conservative haircut methodology (higher of 9% or 6σ VaR) ensures adequate risk coverage
  • Quantity limits prevent concentration risk in collateral portfolios

Market Impact

  • Affects liquidity management for trading and clearing members
  • Members using listed securities as collateral must ensure compliance with permitted quantities
  • No direct impact on secondary market trading of these securities

Annexure Details

The circular includes a detailed table with 19+ securities (table appears truncated) containing:

  • Serial numbers and scrip codes
  • ISIN codes for each security
  • Company names (ABB India, Aegis Logistics, Amara Raja Energy & Mobility, Bombay Dyeing, Atul, Bajaj Electricals, Bajaj Hindusthan Sugar, Force Motors, Bajaj Finance, Balrampur Chini Mills, Banco Products, Aditya Birla Real Estate, BASF India, Bata India, BEML, Bharat Electronics, Bhansali Engineering Polymers, Blue Star, CESC, and more)
  • Overall permitted quantities ranging from approximately 1 million to 714 million units
  • Uniform haircut methodology across all securities

Impact Justification

Standardizes collateral file format affecting clearing members and their eligible collateral usage across BSE segments. Impacts operational processes for margin requirements.